Briggs: Nevermind AT&T and Comcast. Tax cuts probably won't get you a bonus.

The Tax Cuts and Jobs Act was finally passed on Wednesday. The bill is unpopular with Democrats and the American people, but AP economic analyst Josh Boak says we might see edits in the coming years. (Dec. 20)
AP

Speaker of the House Paul Ryan, R-Wis., center, accompanied by Senate Finance Committee Chairman Orrin Hatch, R-Utah, right, signs the final version of the GOP tax bill during an enrollment ceremony at the Capitol in Washington, Thursday, Dec. 21, 2017. (AP Photo/Andrew Harnik)(Photo: Andrew Harnik, AP)

An interesting thing happened after Congress passed its enormous tax overhaul Wednesday: Several large companies immediately announced plans to give bonuses and wage hikes to employees, while also investing more money in U.S. operations.

AT&T Inc. jumped first, announcing it would pay a $1,000 bonus to more than 200,000 workers while investing $1 billion next year. Comcast Corp. also will give $1,000 bonuses to 100,000 workers. Cincinnati-based Fifth Third Bancorp said it would give $1,000 bonuses to 13,500 employees and set a new $15 minimum wage. Wells Fargo & Co. raised its minimum wage from $13.50 to $15 (while sending mixed signals on whether this was related to the tax bill) and Boeing Co. said it would invest $300 million because of the tax bill.

This flurry of promised handouts for the middle class — companies noted payouts would only apply to non-executives — seemed jarring at the end of a process in which lawmakers struggled to explain how hourly workers would benefit from the tax cuts. Congressional Republicans who shepherded the bill to passage might be wondering where those types of pledges were before they voted on a remarkably unpopular package.

The longer-term outlook is more complicated because Congress chose to make corporate tax cuts permanent while setting most individual provisions to expire after 2025, leaving the eventual effect on middle class households up to the changing political winds.

The process through which the bill was crafted and passed showed it primarily is intended to benefit large companies, executives and investors. When lawmakers tried to explain how the bill will help regular people, examples tended to include complex family and income scenarios.

Companies such as AT&T and Comcast are providing the clearest link yet between the recently passed tax cuts and extra money for regular taxpayers. But there's a reason why we've only started to hear about this link: Big corporations were not lobbying for tax cuts in order to pass their savings onto employees.

Several companies this year have stressed to me the need for tax reform — but none of them cited a desire to enrich their employees. I reached out to a few of Central Indiana's largest public companies to ask how they intended to use their tax-cut savings.

Eli Lilly & Co. Inc. in a statement said "this legislation achieves many objectives important to Lilly, including a significant corporate tax rate reduction, territorial taxation of foreign earnings, preservation of the R&D credit and leveling of the playing field for U.S. companies in the global marketplace."

A Cummins Inc. spokeswoman similarly said the bill puts the engine maker "on an equal playing field with our global competition" and "will allow us to invest in our sites, innovation and research and development, and it will help us strengthen our communities."

No one offered specific details.

When some companies say they will use tax-cut savings to give bonuses and pay raises to employees, it's good to remember a couple things. For one, that money will only account for a fraction of what those companies can expect to save annually thanks to the legislation.

Also, some companies have strategic reasons to curry favor with the Trump administration. AT&T, for instance, is seeking regulatory approval for a takeover of Time Warner (the Justice Department is suing to block the merger).

That doesn't mean AT&T employees shouldn't be thankful for their $1,000 bonuses. But it does mean AT&T's bonuses aren't necessarily valuable data points for evaluating the tax overhaul.

Most taxpayers won't see such a direct benefit — via either a bonus from their employer or noticeable tax savings. The average person will save a few bucks, but it won't be lifestyle-altering. The average large corporation will save a whole lot of bucks.

The merits of the Tax Cuts and Jobs Act won't be determined by a few up-front bonuses, but rather by what companies do with their savings in the years to come.

Call IndyStar business columnist James Briggs at (317) 444-6307. Follow him on Twitter: @JamesEBriggs.